Paramount Skydance Completes $110bn Warner Bros. Discovery Merger

Paramount Skydance has closed its $110bn acquisition of Warner Bros. Discovery (WBD), creating one of Hollywood's biggest entertainment companies and adopting the unified corporate name Skydance.

The company says it now has the largest theatrical output in the business, a franchise portfolio ranging from Top Gun and Harry Potter to White Lotus and SpongeBob SquarePants, and more than 200 million streaming subscribers across its platforms. It reports nearly $70bn in revenue and expects to generate more than $10bn in free cash flow by 2030.

Skydance said Paramount Studios and Warner Bros. Studios are targeting more than $6bn in run-rate synergies over the next three years, driven by technology, integration and procurement, marketing and real estate rationalisation. The aim is to free up investment for stories, creators and technology while cutting net leverage to a 3.0x target by the end of 2029.

Chief executive David Ellison confirmed the combined company will be called Skydance, explaining on X that the move was intended to "give the combined company an identity of its own while allowing Paramount and Warner Bros… to remain in the spotlight." However, Reuters analysts countered that the name "reinforces the extent of Ellison's control, highlighting how some of Hollywood's most iconic brands now answer to him and how he has a platform to impose his strategy and culture".

The enlarged group brings together Paramount Pictures, Warner Bros. Pictures, Paramount Television, Warner Bros. Television, CBS, CBS News, CBS Sports, CNN, HBO, HBO Max, TNT, TBS, Discovery, HGTV, Food Network, Nickelodeon, Cartoon Network, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance's Animation, Film, Television, Interactive/Games and Sports Entertainment units. The company also plans to combine HBO Max and Paramount+.

When announcing completion, Skydance stated: "[The] pro forma content spend of more than $30bn for the last 12-month period will be disciplined and strategic, prioritising audience reach and long-term value creation."

Looking ahead, Paramount Studios and Warner Bros. Studios will each produce a minimum of 15 high-quality feature films per year, for at least 30 films annually across the group. Each title will receive a full theatrical release with a minimum 45-day global window before paid VOD, with an intention of 60–90 days or more. HBO will continue to operate independently under the new ownership.

Skydance has also pledged to continue supporting the independent production sector by commissioning from third-party studios and licensing its own content to external partners, creating additional opportunities and jobs on and off screen.

The tie-up follows Paramount Skydance's settlement with 12 US states, regulatory scrutiny in nearly 70 jurisdictions worldwide, and heated competition from Netflix.

Reuters reported the combined company is expected to carry about $80bn in debt. Ellison's annual base salary will be $5m, with a target annual bonus of $5m.

To run the organisation, Ynon Kreiz, CEO of Mattel, will become Co-CEO, focusing on day-to-day management and integration, while Ellison leads long-term strategy, creative vision and direction, including talent relationships, strategic partnerships, technology and capital allocation. They will be supported by a new CEO Leadership Team that includes Andy Gordon, Casey Bloys, Mark Thompson and Bari Weiss.

David Ellison, Chairman, CEO, Skydance, said: "Today is a historic day, not just for Skydance but for our entire industry. From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere. Now that ambition is a reality. We're grateful to everyone who made this possible – the employees, creative talent, and production teams of both companies, who worked tirelessly to get us here and inspire audiences around the world every day, as well as the advisors and partners who guided this transaction to completion. Our focus now turns to the future: building a company that empowers creatives, entertains audiences and rewards shareholders. We couldn't be more excited to get to work."

The transaction included $47bn of new equity investment in Class B Common Stock, led by the Ellison Family, RedBird, the Public Investment Fund (PIF), Abu Dhabi Developmental Holding Company, Qatar Investment Authority (QIA) and LionTree, priced at $12.00 per share. Under the agreement, WBD shareholders received $31.02 per share in cash.

Gerry Cardinale, Founder, Managing Partner, RedBird Capital, and Skydance Board Director, added: "This is a defining moment for the industry. By applying our owner-operator model to Paramount and WBD's unmatched portfolio of iconic franchises, premium original programming, and live sports rights, we can protect that legacy while building for a media landscape that's undergoing transformational change. David, our Co-CEO Ynon Kreiz, and the rest of our world-class Skydance team have the vision and track record to lead through this change. We're proud to back them as we build a stronger Hollywood, expand opportunities for talent, and create long-term value for our shareholders."

The merger closes as the US Federal Communications Commission recently voted to repeal its 39% national television multiple ownership cap, replacing it with a case-by-case review.